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As Nareit described in a May 2017 As most investors know, the markets
article: don’t tend to take kindly to anything
“According to research from the brand-spanking new. They like to
Joint Center for Housing Studies of see a strong success story before
Harvard University, record demand they deem something worth
growth spurred an influx of more backing.
than 8 million new units of rental
housing stock in the United States in Yet that stand-back phase seems to
the decade between 2005 and 2015. have ended fairly quickly for single-
Conversions of single-family houses family REITs thanks to an initially
from owner-occupied to rental intense demand for their offerings.
accounted for roughly 80% of the That doesn’t mean, however, that
increase, as the single-family share we’re buying what they’re selling
of the total rental stock climbed here at iREIT.
from 34% to 40% in the 10-year
period. Single-family real estate investment
“This growth is notable not trusts involve high costs of
only because it is so substantial, but operation, which cut into their
also because institutional investors profits and then cut into the
have taken a much more active role legitimate yields they can offer.
in this market than in the past,” the Buying houses is expensive in and
Harvard researchers reported. “By of itself, but so is fixing them up and
creating large portfolios of homes keeping them properly maintained.
across many markets, large-scale
investors are testing the waters for a With apartment complexes, they
new model of owning and operating can hire a full-time maintenance
scattered-site properties that staff to address issues as they arise.
could expand the range of housing But that’s because the homes in
options available to renters.” question are contained within a very
specific area.
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